Scrap the beer duty rise — now
Great news that John Grogan MP has managed to get five government ministers in a room together to discuss the deepening pubs crisis. But as he himself says, it's now a race against time to take decisive action that can slow the tsunami of pub closures engulfing our trade.
Most of the steps that could help — a reduced rate of VAT on draught beer to reverse the trend of drinking at home, an increase in AWP stakes and prizes, simpler rules for diversification, increased rate relief and a simplification of the licensing process — cannot be done quickly. They'll require much discussion, and, if agreed, will then need slotting in to a hectic legislative timetable. As we know, each month of delay sees the demise of another 160-odd pubs.
The only quick remedy is to scrap the inflation-plus duty rise scheduled for this year's Budget. If that was to go ahead, the rate of pub closure could easily accelerate. It must be scrapped now.
Doing so will not cost the Government as much as it's losing from the last duty hike, and will continue to lose if duty is again increased. It just does not make sense to force fresh costs on any industry when we're in a hole as deep as this.
Every pubco knows the truth in that. To a man, they are trying to shield their licensees from this year's round of beer rises. Robinson's and Adnams — full credit to them — are holding their prices at last year's levels. Some are just passing on small rises. It's a shame that some other brewers — mainly the global players — still seem to be living in a pre-recession time and posting 5%-plus annual rises. Perhaps when they send in their bill, they could enclose a briefing document explaining how licensees are meant to pass those rises on to whichever of their customers they have left who have not deserted to Wetherspoon's.
The success of JDW's 99p Greene-King-IPA offer shows how keen people are to seek out great value offers. But it's also a benchmark to compare other prices against, which can leave customers feeling hard done by. It's one thing comparing supermarket prices against your local pub's offer. It's quite another when your local's prices are made to look extortionate by another pub. You do wonder how much trade could be drawn back to pubs if every one was able to offer a 99p pint. Real ale sales, for one, would rocket.
Clearly, only a handful of lessees could do this — unless their pubco was prepared to sacrifice a major chunk of margin. But if Wetherspoon's can apparently still make a slim profit on that sale price, couldn't a few pubcos be similarly generous for a while?
